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Trust
chapter tables |
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Taxation
statistics - whole document |
This chapter provides
information on trusts, as reported on their trust income tax returns. A trust
exists where a person, the 'trustee', is under an obligation to hold property
or derive income for the benefit of another person or persons, known as
'beneficiaries'. This obligation usually arises under the express terms of a trust,
but may also be imposed by court order or declaration, or by the operation of
law. Although the trustees hold the legal title to the property, they must deal
with it in accordance with the terms of the trust for the benefit of the
beneficiaries.
Beneficiaries can include
public and charitable institutions, and the potential beneficiaries of a
discretionary trust can include people not yet born.
A trust is not a legal
entity and generally does not pay tax in its own right. In general terms, it is
the beneficiaries who are subject to tax on their share of the net income of
the trust (or can claim a deduction for their share of any trust loss). Certain
public unit trusts are taxed as companies, and are therefore not included in
the statistics of this chapter.
The trustee is generally
only taxed on the proportion of the net income of the trust that is accumulated
in the trust or that relates to certain types of beneficiaries (such as those
beneficiaries who are under a legal disability). That is, broadly speaking, the
trustee is taxed on that part of the net income of the trust for tax purposes
that is not assessable to a beneficiary. The net income of the trust is
generally assessable to the trustee or the beneficiaries in the income year in
which it is derived by the trust.
An annual tax return must be
lodged for a trust, regardless of the amount of income derived by the trust,
even if it derives nil income or incurs a loss for tax purposes.
OVERVIEW
For the 2009-10
income year:
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